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DATA POINTS - WorkPlace Performance Evidence to Ponder

"I've learned that people will forget what you said, people will forget what you did,
but people will never forget how you made them feel."

Maya Angelou


"VISIONING" IS LIKE HAVING A CRYSTAL BALL

Our business and industry experiences are captured in short "SPARKS" that may trigger inspiration - to focus your resources and strategies, resolve challenges and bring value to a given project initiative.




Organizational performance research for business success is well-documented and compelling. Large company findings is fully applicable and scaled to the needs of small and mid-sized businesses.

If you are curious and want to see additional resources that support our work, please contact us.

ON LEADERSHIP

"Every enterprise requires commitment to common goals and shared values. Without such commitment there is no enterprise; there is only a mob. The enterprise must have simple, clear, and unifying objectives. The mission of the organization has to be clear enough and big enough to provide common vision. The goals that embody it have to be clear, public, and constantly reaffirmed. Management's first job is to think through, set, and exemplify those objectives, values, and goals."

Source: Peter F. Drucker, The Essential Drucker

Engagement largely falls on managers' shoulders, yet Gallup research shows that a strikingly low percentage of managers are themselves engaged. In a study of 2,564 U.S. managers, we found that just 35% are engaged, while 51% are not engaged and 14% are actively disengaged. By Gallup's estimates, the "not engaged" group costs the U.S. $77 billion to $96 billion annually through their impact on those they manage. And when we factor in the impact of the "actively disengaged" group, those figures jump to $319 to $398 billion annually.

Source: Gallup

Fred Kiel, a founding partner of KRW International, a leading leadership consulting firm, in his book Return on Character determined this: "The most surprising finding was that 'virtuoso' leaders of strong character bring five times as much to the bottom line as do low-character leaders. The level of workforce engagement was 26 percent higher for high-character leaders."

Source: Fred Kiel, Return on Character

In the book Why the Bottom Line Isn't by Dave Ulrich, he writes "leaders should focus on leading indicators of future success. In other words, how leaders create market value through people and organizational capabilities is key to an increase in their company's valuation."

Source: Dave Ulrich, Why the Bottom Line Isn't

"To be sure, the fundamental task of management remains the same: to make people capable of joint performance through common goals, common values, the right structure, and the training and development they need to perform and to respond to change."

Source: Peter F. Drucker, The Essential Drucker

ON CULTURE

Adrian Gostick and Chester Elton write in their book 'All In' … "if your culture is clear, positive and strong, then your people will buy into your ideas and cause and, most important, will believe what they do matters and that they can make a difference."

A study done in the mid-1990s by Harvard Business School professors … found that those strong cultures "encourage leadership from everyone in the firm. So if a customer's need changes, a firm's culture almost forces people to change their practices to meet the new needs." The financial impact of such a culture? Over the eleven- year period studied by the professors, revenue growth in the companies with "positive" cultures grew an average of 682 percent compared with 166 per cent in the firms with "weak" cultures, and the difference between stock appreciation was 901 per cent to 74 per cent.

Source: Adrian Gostick & Chester Elton, All In

ON EMPLOYEE ENGAGEMENT

Gallup is a highly-esteemed research group for large business organizations. Here is a summary of what Gallup has done for everyone's enlightenment, pulled from various reports and publications in recent years.

KEY GALLUP SUMMARY DATA

9 Key Performance Metrics

A recent iteration of Gallup's comprehensive world-wide survey continues to support the correlation between employee engagement and nine specific performance outcomes:

  1. Customer Ratings
  2. Profitability
  3. Productivity
  4. Turnover (for high and low-turnover organizations)
  5. Safety Incidents
  6. Shrinkage (theft)
  7. Absenteeism
  8. Patient Safety Incidents
  9. Quality (defects)

Engaged / Disengaged Employees

  1. In world-class organizations, the ratio of engaged to actively disengaged employees is almost 10:1.
  2. In average organizations, the ratio of engaged to actively disengaged employees is about 2:1.
  3. Gallup has reported in May, 2015 that U.S. employee engagement is 31.5%

Financial Performance via Engaged Employees

Data from major business research firms confirms a correlation between better financial performance and a company cultures of engaged workforces. Specifically, companies with engaged employees are:

  • 18% more productive
  • 12% more profitable
  • 12% better at engaging customers
  • 51% less likely to leave
  • 27% less absenteeism
  • 51% less likely to be source of inventory shrinkage

Source: Gallup

Other Notable Sources on Employee Engagement

Companies with highly-engaged employees earned 13% greater total returns to shareholders.

Source: Watson Wyatt

The leading management firm Towers Perrin studied 50 multinational companies. They found companies with high levels of employee engagement outperformed companies with less employee engagement in three key financial measures:

  1. Operating Income
  2. Net Income Growth
  3. Earnings Per Share

A major survey conducted by the Public Agenda Forum found:

  1. Fewer than 25% of American workers are working to their full potential
  2. 75% said they could be significantly more effective in their jobs than they are
  3. 60% believe they don't work as hard as they did in the past

EMPLOYER/EMPLOYEE MINDSET GAPS

Employers think that 80% of their employees are fully engaged. Only 12% of employees say that they are fully engaged.

57% of employees are likely to leave in the near future. Only 16% of employees say they are unlikely to leave in the near future.

To get maximum employee performance, employers think 18% employees want a greater understanding of how the work they do contributes to the company. In reality, 34% of employees say they want a greater understanding of their work contribution.

Source: ACT.1 Group

ON CUSTOMER EXPERIENCE

The leaders in your business must communicate the vision, intention, mission and focus of your organization, and how to meet the market place demands for your business. It is impossible to have great customer experiences, without having a culture of engaged and motivated employees, using their strengths and capabilities to create engaged customers.

The Gallup organization has made a very clear connection between employee engagement and customer experience. Their findings conclude that you cannot have good customer experience without good employee engagement.

Companies with fully engaged customers deliver 23% premium over average customers in:

  1. Share of Wallet
  2. Profitability
  3. Revenue
  4. Relationship Growth

In stark contrast, actively disengaged customers represents a 13% discount in those same measures.

Source: Gallup

GAPWORX Comment: The Gallup evidence above suggests a 36% gap in performance measures
per the four categories listed above.

Dr. Leonard Berry in Discovering the Soul of Service, comments on the efforts of marketing. "The marketed brand contributes to brand meaning, but not as strongly as the customer's actual experience with the company."

Source: Lewis P. Carbone, Clued In

"And landmark advances in understanding how people-especially in their role as customers-think and make decisions promise to provide the necessary knowledge and insight to help businesses rewire the rules of the value proposition around systems that design, manage, and leverage total experiences.

The completive advantage that can be realized from experience management is directly proportionate to an organization's ability to design and maintain effective, integrated, and meaningful experiences.

Experience value management has the potential to generate powerful returns on investment from even basic adjustments to the way you've "always" done something, no matter how regulated, regimented, or routine the experience you provide."

Source: Lewis P. Carbone, Clued In

Up to 80% of defecting customers describe themselves as "satisfied" or "very satisfied" … just before they leave.

Source: Business Week

In 2012, Oracle commissioned independent research on customer experience. Key findings include:

  1. 70% of shoppers have stopped buying goods or services from a company after experiencing poor customer service
  2. 64% have, after experiencing poor customer service, gone straight to a competing brand to make a purchase
  3. 81% are willing to pay more for a better customer experience

Source: Oracle Study

Emotional Intelligence (EI)

Emotional Intelligence is generally seen as a set of abilities:

  1. Recognizing Emotions. Awareness of their own and others' feelings.
  2. Facilitating Emotions. Ability to make others feel good about themselves, and be engaged and productive.
  3. Understanding Emotions. Moving beyond "recognizing" feelings to understanding and insight.
  4. Managing Emotions. Deliberate abilities to manage their own and others' emotions, to create passion and inspire.

Source: UNC Kenan-Flagler Business School, L. Garris, 2013.

Over 80% of the competencies that differentiate a company's top performers are attributes inside the domain of Emotional Intelligence.

Source: Harvard Business Review, 2003.

Salespeople selected on the basis of their degree of emotional intelligence competencies had 63% less turnover during their first year of employment.

Source: Spencer & Spencer, 1996.

70% of lost clients are due to an Emotional Intelligence-related cause, such as the customer not liking the level of delivered customer service.

Source: Forum Corporation on Manufacturing and Service Companies, 1999.

After a Motorola manufacturing facility provided training in stress management and Emotional Intelligence, 93% of the employees had an increase in productivity.

Source: HeartMath, 2003.


"Organization audits diagnose the extent to which an organization possesses the capabilities, or intangibles, to deliver strategic, product, and financial goals."

- Dave Ulrich, Why the Bottom Line Isn't